Ariana Resources: A piece of Turkey in the heart of Mayfair

The Chesterfield Hotel in Mayfair on Wednesday evening was the setting for Ariana Resources (LON:AAU) latest investor presentation. Hosted by Proactive Investors, Ariana shared the billing with Western Potash (TSX.V:WPX) who have a "solution" mining project in Regina Canada and Resource Generation (ASX:RES), who are developing a coal mine in South Africa. Having attended a few of these Proactive events, one knows their success is always dependent on the calibre of company/management presenting and the mood of the room on the night!

This time round the event was very well supported with a lively mix of finance professionals and private investors. To compliment the event, Proactive Investors even produced a new in- depth research note on Ariana (click here to view). MD Kerim Sener presented the company's investment case to a receptive audience, though it was clear from the post event conversations that few had previously heard about the company. That being the case, with just 30 minutes of stage time, the big challenge was to concisely introduce the company whilst doing justice to all aspects the investment case. Not as easy as it may seem. Ariana has some very significant irons in the fire; not least of which being the pending Proccea JV (click here for latest update), so there is always a real danger that, depending on how the delivery goes, the proverbial cake could be largely obscured by a rather oversized cherry! But with the support of a well-crafted presentation (click here to view ) Kerim managed to take people through the Ariana story, doing justice to all aspects and giving additional detail as and when required.

So what did we learn? With the presentation geared towards the uninitiated, the natural starting point was the country itself; Turkey being an economic powerhouse in the region with mining friendly legislation, situated on the highly prospective Tethyan Metallogenic Belt. All good stuff (click here to view our value proposition on Ariana) and it also served as a good refresher for existing investors. We also noted that good progress is being made with the EGU JV and Ariana's own ongoing exploration work is all very much on track.

But what about the Proccea JV? Kerim elaborated on certain details here making a point of commenting on the good cooperation with Proccea and the speed of progress. But one of the more intriguing nuggets we gleaned was that under the terms of the JV agreement, as Ariana continues to prove up more ground within in the Red Rabbit project area, the Company has the right, but not the obligation, to sell the resource into the JV for 3x the exploration cost. This was a really interesting detail as it gives some background to the principles by which the two parties have agreed to divide the spoils. In order to prolong the life of the mine, Ariana needs to continue exploration work thereby expanding the resource within the Red Rabbit project area. But with ongoing exploration work at Ariana's cost, a formula was needed to provide Ariana with the financial incentive, to prove up more ounces. This solution means that, when selling the resources into the JV, Ariana will recover all of its exploration costs, plus a fair premium on top. And since there is no obligation to sell any additional resource into the JV, the company would also be free to consider any outside interests, thereby maximising its potential returns.

With the presentation over the networking began. Ariana had pulled in a full team for the evening, including all the main board directors, as well as their broker from Alexander David Securities. They were certainly in demand as between them they worked the room collecting and handing out business cards and talking Turkey! The next event will be the Minesite presentation on 16th March (for details click here). To subscribe to Ariana Resources company updates, click here. Previous Miningmaven articles on Ariana Resources include: Ariana Resources: Buy me a Gold Mine in Turkey!  (3 January 2010),  Ariana Resources: Going for Gold in "Turnkey" Turkey (30 January 2010), Ariana Resources: Lets get this show on the road  (10 February 2010) and Ariana Resources: Limbering up for the Main Event (18 February 2010). To view the latest 2010 presentation from Ariana , click here